By Mike Cherney


SYDNEY--Australian grocer Coles Group Ltd. said it agreed to sell its fuel and convenience business to fuel supplier Viva Energy Group Ltd., which will own and operate hundreds of Coles Express sites currently run by the grocer.

Coles said it will receive 300 million Australian dollars from the transaction ($200.7 million), as well as assign leases, which currently represent a liability of A$816 million, to Viva Energy when the deal completes.

The deal is subject to Australian Competition and Consumer Commission and Foreign Investment Review Board approval. The transaction is expected to close in the second half of fiscal 2023.

"Viva is well-placed to make the most of opportunities to grow the Express business into the future, while we will strengthen our focus on our omnichannel supermarket and liquor businesses and our ambition of becoming Australia's most sustainable supermarket group," said Coles Chief Executive Steven Cain.

Coles said it will partner with Viva Energy to supply products so that customers can still access the Coles Own Brand range. Coles added that Viva Energy will remain a partner of its loyalty program and that customers will be able to continue earning and redeeming points.

The grocer said it expects to record a small gain on the sale of the business. The earnings impact of the product supply arrangement won't be material, it said.

The deal will create the largest single-branded Australian fuel and convenience network under a single retail operator, according to Viva Energy, and provide the company a platform to accelerate plans to further grow its retail network and fuel and convenience business.


Write to Mike Cherney at mike.cherney@wsj.com


(END) Dow Jones Newswires

09-20-22 1928ET